Evolving AML/CFT Expectations and Enforcement Priorities as FinCEN Releases FY 2025 Year in Review

On April 16, 2026, the Financial Crimes Enforcement Network (“FinCEN”) released its Year in Review for Fiscal Year 2025 (the “FY 2025 Report”). The report provides a concise overview of recent regulatory and enforcement developments in the financial crimes space and offers insight into FinCEN’s evolving priorities.

I. Overview: Alignment with Administration Priorities

FinCEN highlights several key accomplishments over the past year, including reporting $10 billion in savings attributed to deregulatory efforts, enhancing the management and sharing of Bank Secrecy Act (“BSA”) data with law enforcement, and expanding engagement with private-sector stakeholders on anti-money laundering and countering the financing of terrorism (“AML/CFT”) issues.

The agency characterizes its work as aligned with broader Administration priorities, including combating cartels and drug trafficking, increasing pressure on Iran, and addressing crimes such as fraud and the sexual exploitation of minors.

II. An Evolving Regulatory Landscape: Proposed Rulemaking

The FY 2025 Report underscores FinCEN’s efforts to “modernize the U.S. AML/CFT regime.” Notably, FinCEN has signaled those efforts will continue those efforts in FY 2026 with the publication of its April 7, 2026 proposed rule. Among other changes, the proposal introduces a two-pronged framework distinguishing between a financial institution’s obligation to establish an AML/CFT program and to maintain and implement that program.

This distinction may signal a meaningful shift toward evaluating program effectiveness. Under the proposed framework, enforcement and supervisory action would generally focus on “significant or systemic” failures in implementation, rather than deficiencies in program design. FinCEN has indicated that the proposal is intended to promote “risk-based, reasonably designed programs” and greater consistency in supervisory assessments.

The report also addresses enforcement activity, noting that FinCEN received 198 whistleblower reports in FY 2025 and imposed over $1.3 billion in civil penalties. In addition, FinCEN highlights a separate proposed rule aimed at enhancing whistleblower incentives and protections. Under that proposal, eligible whistleblowers could receive awards of 10–30% of collected penalties where their information leads to successful enforcement actions.

III. Continued Emphasis on Public-Private Collaboration

Collaboration remains a central theme of the FY 2025 Report. FinCEN emphasizes its ongoing engagement with stakeholders, including through the FinCEN Exchange, a public-private information-sharing initiative described as a “critical feedback loop” between government agencies and financial institutions.

Recent FinCEN Exchange efforts have focused on issues such as financial flows linked to drug trafficking organizations and terrorism-related activity involving Iran. The report signals FinCEN’s continued commitment to expanding coordination with the private sector through such initiatives.

FinCEN also highlights its role in providing financial intelligence derived from BSA reporting to law enforcement. According to the report, 90% of surveyed partners reported that BSA data is valuable, and total BSA data searches exceeded 63.9 million in FY 2025, underscoring the operational importance of these data.

In addition, FinCEN notes its issuance of advisories, notices, and financial trend analyses addressing threats to the U.S. financial system, including Iran’s illicit oil smuggling and transnational financial crime involving jurisdictions such as Mexico and China.

The report also addresses FinCEN’s efforts to support victims of financial crime through its Rapid Response Program, noting that $95.5 million of $182.2 million in frozen funds were returned to victims in FY 2025.

IV. Key Takeaways

The FY 2025 Report offers several key insights for financial institutions and other stakeholders:

• Alignment with national priorities: FinCEN’s activities remain closely tied to broader U.S. law enforcement and national security objectives. As a result, geopolitical and domestic policy developments—particularly those related to drug trafficking, sanctions, and certain jurisdictions—are likely to continue shaping enforcement priorities.
• Shift toward effectiveness-based compliance: Recent and proposed rulemakings suggest a continued move toward risk-based, effectiveness-focused AML/CFT frameworks. The proposed distinction between program establishment and implementation, along with enhanced whistleblower incentives, may increase scrutiny on how programs operate in practice, not merely how they are designed.
• Ongoing regulatory evolution: FinCEN has demonstrated a willingness to revisit and update core AML/CFT requirements. Financial institutions should anticipate continued regulatory refinement, particularly in areas such as program effectiveness and internal reporting mechanisms.
• Importance of engagement: FinCEN’s emphasis on public-private partnerships, advisories, and information-sharing initiatives highlights the value of active engagement with the agency. Participation in these efforts may help institutions better understand emerging risks and regulatory expectations.

V. Conclusion

The FY 2025 Report reinforces that financial institutions should assess whether their AML/CFT programs are not only compliant, but also aligned with FinCEN’s identified priority risks, capable of generating actionable intelligence, and supported by robust governance frameworks. Institutions should also be prepared for increased scrutiny driven by evolving enforcement standards and expanded whistleblower incentives.

Stakeholders should continue to monitor FinCEN’s regulatory agenda and consider opportunities to engage with the agency as it advances its modernization efforts.

Law clerk Darcy Taylor also contributed to this blog post.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.